10 free CPA practice questions in the real exam format, covering the official content areas, with an explanation for every answer.
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On October 1, Year 1, Quarry Lane Systems signed a contract to deliver diagnostic equipment, install it and provide one year of technical support for a total of $96,000. The three promises are distinct performance obligations. Standalone selling prices are: equipment, $90,000; installation, $10,000; support, $20,000. Control of the equipment transferred on October 1, installation was completed October 20, and support is provided evenly from October 1, Year 1, through September 30, Year 2. How much revenue should Quarry Lane recognize from this contract for the year ended December 31, Year 1?